For “Charge” accounts, payment is expected at some time after the service is delivered. For example, jobs where the customer provides a PO for subsequent billing, or completed jobs that are later entered into a motor club web site for payment. This is in contrast to “Cash” accounts, where payment is expected when service is delivered (e.g., like buying an oil filter at Walmart).

To be handled appropriately in the Ranger accounting process, the accounting “basis” for each account must first be defined for the account. The accounting basis for a customer is configured in “Accounts” – “Account detail” for that customer

Before delving into accounting, it is helpful to review some key elements of the pricing approach in Ranger

• The pricing rate structure for services delivered - e.g., towing, storage - is defined in pricing templates
• This rate structure (pricing template) is associated with appropriate accounts
• For a tow job, the pricing parameters are sent along with the call information to the driver on their mobile device; Similarly for a storage job, a pricing template (rate structure) is applied to each job
• There is considerable flexibility to adjust the pricing of a job, e.g.,
  • Adjustments can be made to reflect special circumstances, such as increases/decreases for added requirements or service shortfalls
  • Depending on process choices and user permissions, pricing changes can occur both during a job and after it has been completed
• Given the flexibility for pricing corrections/adjustments in Ranger, there is an explicit step to determine when further changes are no longer appropriate - a decision/action to “Finalize Pricing”

The accounting process for “Charge” account has both similarities and important differences as compared to the process for “Cash” accounts.

• The main similarities: the same decision/action to “Finalize pricing” on an invoice is required, the same information is available to support decision-making, and the same actions to “Finalize pricing” are available
• The main differences reflect the nature of working with “Charge” accounts
  • Payments are typically received after services have been delivered, and often apply to more than one invoice. As a consequence, additional processes are necessary
    • For receiving payments - e.g., checks in the mail
    • For applying payments to invoices recognizing that a payment might be for a collection of jog invoices (Note - payments can only be applied to Invoices where a decision/action has been taken to “Finalize pricing)
    • For creating and applying additional price adjustment mechanisms that are available for “Charge” accounts: account-level pricing (off-invoice) vs. job-specific-pricing (on-invoice, defined in pricing templates)

At the account-level for “Charge” accounts, there are three adjustments available that expand the scope of available commercial arrangements:

• Terms - such as 2% 10 Net 30 (customer gets a discount for early payment)
• Negotiated Discounts - such as a percentage rebate (e.g., 5%) based on volume
• Credits and Allowances - such as a one-time amount to settle a disagreement on damage to a vehicle or service level

For many “Charge” accounts, none of these special price adjustment mechanisms are applicable. They customers are classified as “Charge” accounts because payment is received after service is delivered. For those accounts where “off-invoice” commercial arrangements are appropriate, the adjustments, in effect, act as deductions that reconcile the amount charged on invoices to the payment received from the customer (Account).

Payment terms - which are user-defined - are date-driven and are generally incentives for prompt payment. To construct options

1. Click on “Payment terms” in the “Accounting” – “Charge Account” menu
2. The dialogue box provides the structure for needed inputs, and each arrangement then becomes available for use with a “Charge” account
3. For the relevant Accounts, go to “Accounts” - “Account detail”, click on the relevant customer, and select the appropriate terms from the drop-down menu

If using QuickBooks, the terms should be defined in QuickBooks. Terms are one of the few fields that flow from QuickBooks to Ranger.

When payments are received and applied, Ranger calculates the expected adjustment for terms. Timing is based on the latter of the Invoice Date (the last time pricing on the invoice was modified) or the Statement date - i.e., the first time an invoice was included on a Statement to a customer. If the Ranger user has the requisite permissions, the amount of the discount for terms can be modified from the calculated amount by entering a different value in the field. For example, the customer may have technically missed the date to be entitled to the discount for early payment. Ranger would calculate the discount as zero. However, the company (Ranger user) may decide to grant the discount anyway in the spirit of strengthening a relationship.

Negotiated discounts - which are user-defined - are calculated as a percentage of the total amount due from the customer. The discount is mathematically based on volume, but commercially could be positioned as one component in a customer loyalty program. To define a negotiated discount:

1. For the relevant Accounts, go to “Accounts” - “Account detail”
2. In the “Negotiated discount” field, enter the discount percent (a 5% discount would be entered as 5, not 0.05)

Remember that these “Negotiated discounts” are off-invoice. There is an option in the Pricing Templates to also define a separate, and different discount that would appear on the Invoice.

When payments are received and applied, Ranger calculates the “Negotiated discount” applicable to each invoice on the statement for the account. The calculation is based on the total amount - not after discounts, if any, for terms or credits/allowances. If the Ranger user has the requisite permissions, the Negotiated discount amount can be modified from the calculated amount. For example, the customer may not have delivered the volume anticipated and may not be entitled to the discount - in which case the discount could be modified to zero by entering that value in the field

Credits and Allowances - which are user-defined - are generally one-time adjustments for special situations. For example, the customer may be entitled to compensation for damage to a vehicle or a service level that did not meet an agreement. Any “Credits and Allowances” require that a Credit Memo be prepared

1. Click on “Credit memo” in the “Accounting” – “Charge Account” menu
2. The dialogue box provides the structure for needed inputs

The application of Credits to an account follows the same process as for payments. From an accounting perspective, the credit is handled as an expense. For purposes of reconciling payments received from a customer against outstanding invoices, it is treated like a cash payment that can be applied to the outstanding balance.

The application of credits to reduce the balance due on an invoice is also part of the Credit memo process. The process follows the same approach as in the application of payments (see next section). Like the application of payments, Credits can only be applied to invoices where a “Finalize pricing” decision/action has been taken.

While the processes for entering a payment and for applying a payment to a collection of invoices are clearly related and intertwined, it is helpful to view them separately. For example, the staff member entering checks from the morning mail, may or may not be the same individual that makes the accounting judgments that are intrinsic to the application of payments. As with “Cash Accounts”, the first step is to finalize pricing

For “Charge” accounts, the same decision/action to “Finalize pricing” on an invoice is required as is the case with “Cash” accounts. The same information is available to support decision-making, and a similar process can be employed:

• The decision/action to “Finalize pricing” can and should be taken as soon after a job is completed as practical
• As payments are expected after the job is complete, the payment process - including any decisions on bad debt - is more complex and periodic (e.g., weekly or monthly vs. daily)

The process to “Finalize pricing” for “Charge” accounts resembles that for “Cash” accounts - beginning with invoices that have been (unexpectedly) paid, and then invoices that are unpaid:

1. Confirm that all accounts have the appropriate configuration for accounting “Basis”
2. In the main menu, go the Accounting menu, and open the “Invoice review” screen under “Charge accounts”
3. The filters enable specific searches, but for the process sequence as outlined above:
   1. Invoice status: select “Paid” (Invoices are “Closed”, no balance due)
   2. Finalized status: select “Not finalized”
   3. Push “Run Report”
4. For these Charge Accounts, the Net Due column will be $0.00 (green) and the Status Column will be “Closed” (green).
   1. These conditions are unexpected job outcomes for “Charge” accounts where payment is typically received after a job is complete
   2. Given that payment has been received, the “Finalize pricing' decision on these invoice will ideally be a formality
5. Review the invoices for accuracy - typically reviewing each invoice one-at-a-time,
   1. Further information for each job is available by expanding the row using the ”+” button at the left
   2. The current pricing for each job (tows and/or storage) can be viewed by pushing the “Details” button
6. Where necessary, adjust pricing - but only where necessary as any adjustment to pricing will require further action for these “Closed” invoices, i.e., realigning expectations with the customer
7. Where appropriate and remembering that this action cannot be undone, “Finalize Pricing”, in one of two ways:
   1. If working through individual invoices, push the “Finalize” button in the “Pricing?” column
   2. Alternatively, go to the “Actions” tab, and push the button labeled: “Finalize all closed invoices”
8. For QuickBooks users, invoices where the decision was made to “Finalize Pricing” and that are “Closed” will be transmitted the next time the process to import data into QuickBooks is triggered

1. Go back to the main menu, go to the Accounting menu, and open the “Invoice review” screen under “Charge accounts” and begin the review of Invoices that are Not Finalized and that are “Open” (balance due)
   1. Invoice status: select “Open” (there is a balance due)
   2. Finalized status: select “Not finalized”
   3. Push “Run Report”
2. For these Charge Accounts, the Net Due and Status columns will both be red. These conditions reflect the expected outcomes for “Charge” accounts. At this point in the process (e.g., daily) the key task is to confirm that job pricing is correct as payment is expected later
3. Review the invoices - typically each invoice one-at-a-time and determine the appropriate next steps
   1. Further information for each job is available by expanding the row using the “+” button at the left
   2. The current pricing for each job (tows and/or storage) can be viewed by pushing the “Details” button
4. As appropriate confirm or correct pricing. For any invoices where pricing is corrected:
   1. The invoice date will change and now reflect the current date - the date of the last price change
   2. The revised invoice should be transmitted to the customer as appropriate - immediately or with the next Statement
5. As appropriate, lock down pricing (“Finalize pricing”) remembering that this action cannot be undone. Push the “Finalize” button in the “Pricing?” column

There are multiple ways to accept job-related payments in Ranger. For example

• For tow jobs: In “Dispatch” – “Job Pricing” – there is a button that triggers the “Accept Payment” dialogue
• For storage Jobs: In “Inventory” – “Vehicle Pricing” – there is a button that triggers the “Accept Payment” dialogue
• For storage Jobs: In Vehicle Processing there is an opportunity to record the final payment before a vehicle is released

Payments received in the course of completing a job are applied to a particular invoice as they occur. While generally for “cash” accounts, payments could be received and recorded for “Charge” accounts.

There are two distinguishing characteristics for receipts that are recorded in the Payment Entry process - they generally:

• Are received after the service delivery process is complete

 * Cover multiple jobs/invoices The receipt of a payment from a customer may or may not specify the relationship of the payment to particular invoices

To enter a new payment (e.g., check received in the mail):

1. Click on “Receive Payments” in the “Accounting” – “Charge Account” menu
2. Select the account from which the payment has been received and then click on “Add payment”
3. Use the dialogue box in the top third of the screen - “Record payment” to enter information on the payment - e.g., amount, date, type
4. Click on “Save Payment”, double check entry, and click on “Confirm”
5. Close the dialogue box

With these actions, the payment will be successfully recorded. In the middle third of the screen, there is a dialogue box to “Apply payment to finalized invoices”. When the payment is recorded, Ranger will tentatively show the payment as being applied to the invoices that have been in the pipeline the longest. However, this allocation can be modified, and is often a separate process as outlined next.

The application of a payment could proceed before closing the dialogue box that records the payment. However, the application process can also be completed independently of the payment entry process - i.e., as a stand-alone process step
It is important to note that payments can only be applied to invoices where the decision/action has already been taken to “Finalize pricing”.

There are a few “best practice” implications

• Review and take action to “Finalize pricing” on a frequent basis
• When applying payments to invoices, be sure to review the list of “Unfinalized invoices” (which are displayed for reference). In particular, review the “Unfinalized invoices” with dates that are older than the invoices to which you might be applying a payment - should payment be applied to these invoices?

Warning: Consider whether customers could be intending to pay for work that has been completed, but the invoice for that work has not yet been Finalized (“Finalize pricing”)

To apply a payment:

1. Click on “Receive Payments” in the “Accounting” – “Charge Account” menu
2. Select an account and then click on “List” - this will show a history of payments that have been “Applied” and payments that are “Unapplied”
3. First, review Applied Payments that are NOT marked as “Finished”
   1. An application of a payment that is not “Finished” can still be modified. For example, the tow boss may want to review the payment application as drafted by a bookkeeper to confirm the numbers
   2. However, it is good practice to keep the list of Applied Payments that are not “Finished” - i.e., still subject to change - to a minimum. The application of subsequent payments assumes that previous Applied Payments are not going to materially affect the application of newer payments
4. Confirm application of any payments that are still pending - Status shows as “APPLIED”, but the “Finished” column is not checked
   1. Click on the payment
   2. Review the application; modify if necessary
   3. Click on “Apply to selected invoices”
   4. Click on “Finish Payment”
5. After action is completed to ensure that all “Applied” payments are also “Finished”, Click on the first Unapplied payment - which will be the payment that has been waiting the longest to be applied
6. Review the invoices for which a “Finalize pricing” pricing decision is still pending (listed on the bottom third of the screen)
   1. Confirm that there are no invoices in the “Unfinalized Invoices” list to which the payment should be applied
   2. As appropriate, exit this process and go to Invoice Review to “Finalize pricing”
7. Review the “Credits” information in the “Record payment” section (top third). If there are credits that are available, decide whether to exit the application of payments process to first apply credits, which will usually be appropriate. (any remaining Unapplied credits will continue to be available)
8. Review the dialogue box in the middle of the screen - “Apply payment to finalized invoices”
   1. Note that there is a default assumption - which can be modified - that the payment will be applied to the oldest invoice first
   2. Note the amounts calculated by Ranger for payment terms and negotiated discounts - these values can be accepted “as is” or modified as appropriate
9. As appropriate, modify the preliminary application of the payment as shown on the screen, e.g.,
   1. Select (Check) different invoices to which to apply the payment rather than those selected by default - e.g., perhaps the customer designated a different set of invoices that they are intending to pay
   2. Revise the Ranger calculated amounts for terms - “Disc (terms)” - and/or negotiated discounts - “Disc(Neg)” - by entering new values in the fields
10. Click on “Apply to selected invoices” - this saves the work
    1. Note that the application of the payment and discounts will result in a zero balance (“Remaining due”) for some invoices - these have become “Closed”
    2. Note also that the application of the payment may be insufficient to fully cover the last invoice to which the payment was applied. The user will be asked to decide whether to “Write-Off” the remaining amount on the invoice as bad debt; choosing “No” keeps the invoice “Open” and on the list - i.e., it can be paid with the application of the next payment
11. Double check entries. When satisfied with the application of the payment, click on “Finish payment”. This step will lock down the application of the payment as prescribed on the screen. This action cannot be undone.
12. When prompted, confirm by clicking on “yes” in the dialogue box
13. Return to “Receive Payments” in the “Accounting” – “Charge Account” menu
14. The payment should show as APPLIED and “Finished” - click on the payment if further confirmation is desired
15. For QuickBooks users, invoices where the “Finalize pricing” decision/action has been taken AND that the payment application process is approved (“Finished” AND that are now “Closed” will be transmitted the next time the process to import data into QuickBooks is triggered. Note: if subsequent payments are collected, these receipts can be recorded in QuickBooks as an offset to bad debt

To Continue

Overview http://www1.rangersst.com/dokuwiki/doku.php?id=support:11_accounting:01_overview

Cash Account Process http://www1.rangersst.com/dokuwiki/doku.php?id=support:11_accounting:02_cash_account_process

Charge Account Process http://www1.rangersst.com/dokuwiki/doku.php?id=support:11_accounting:03_charge_account_process

Invoices - Statements http://www1.rangersst.com/dokuwiki/doku.php?id=support:11_accounting:04_invoices-statements

Implementation http://www1.rangersst.com/dokuwiki/doku.php?id=support:11_accounting:05_implementation